SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement <<<<--------CUSTOMER PLEASE CHECK----<<<<<<<<
( ) 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) No fee required
( ) 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>
[BLESSINGS CORPORATION LOGO] Blessings Corporation
200 Enterprise Drive
Newport News, VA 23603
(757) 887-2100
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 20,1997
To Shareholders of BLESSINGS CORPORATION:
We extend to you a cordial invitation to attend the 1997
Annual Meeting of Shareholders of Blessings Corporation which will
be held at 10:00 A.M. at the Williamsburg Marriott, Auditorium, 50
Kingsmill Road, Williamsburg, Virginia, on May 20, 1997, for the
following purposes:
1. To elect a board of eleven (11) directors to serve for the
ensuing year;
2. To approve the 1997 Long-Term Incentive Plan;
3. To transact any and all business as may properly come
before the meeting.
The Board of Directors has set April 4, 1997, 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
Chief Financial Officer
Secretary
Newport News, Virginia
April 11, 1997
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 20, 1997
---------------------------
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
20, 1997, 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 31, 1996, are first being sent to
shareholders is April 11, 1997.
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.
1
<PAGE>
Voting Securities and Principal Holders Thereof
Only common shareholders of record at the close of business on April 4,
1997, are entitled to vote at the annual meeting. On March 12, 1997, 10,125,721
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.
Abstentions will be, but broker non-votes will not be, considered shares
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 4, 1997, will be available at
the office of Geddy, Harris & Geddy, 516 South Henry Street, Williamsburg,
Virginia, for the ten days preceding the annual meeting. Inspectors of the
elections will be provided by the Company's transfer agent ChaseMellon
Shareholder Services.
Principal Shareholders
Reported as of December 31, 1996
Set forth below is information relating to the beneficial ownership of the
Company's common stock by each person or group of affiliated persons who is
known by the Company to own more than 5% of the Company's common stock.
<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............................ 619,702 6.1(2)
Quest Advisory Corporation
Quest Management Company
1414 Avenue of the Americas
New York, NY 10019................................ 577,100 5.7(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.............................. 5,500,728 54.3(3)
Williamson, Philip C.
Williamson-Dickie Manufacturing Company
PO Box 1779
Fort Worth, TX 76101.............................. 5,500,696 54.3(4)
</TABLE>
2
<PAGE>
Security Ownership by Management
Reported as of February 3, 1997
Set forth below is information relating to the beneficial ownership of the
Company's common stock by (1) each of the Company's directors and named
executive officers who own common stock, and (2) all of the Company's directors
and named executive officers as a group.
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Title of Beneficial of
Class Name and Address of Beneficial Owner Ownership (1) (5) Class (6)
- ------------- --------------------------------------------------------- --------------------- ---------
<S> <C> <C> <C>
Common Stock Birnbaum, Leonard........................................ 78,338 *
Durboraw, Wayne A........................................ 8,212 *
Harkins, Joseph J........................................ 11,234 *
Hogg, John M............................................. 2,000 *
Hudson, Kenneth J........................................ 7,000 *
Luke, James P............................................ 62,875 *
McMackin, John W......................................... 21,042 *
Miller, Elwood M......................................... 77,894 *(7)
Patton, Richard C........................................ 2,200 *
Villarreal G., Manuel.................................... 396,000 3.9(8)
Weber, Robert E.......................................... 11,100 *
Williamson, J. Donovan................................... 5,500,728 54.3(3)
Williamson, Philip C..................................... 5,500,696 54.3(4)
All of the above and other executive officers
as a group (17 persons)................................ 6,197,937 60.7
</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 Notices of Filing with the Securities and Exchange
Commission on Schedule 13G of beneficial ownership of shares of Blessings'
common stock in excess of 5% of total shares outstanding from Quest Advisory
Corporation and Dimensional Fund Advisors, Inc. Dimensional Fund Advisors,
Inc. ("Dimensional"), a registered investment advisor, is deemed to have
beneficial ownership of 619,702 shares of Blessings Corporation stock as of
December 31, 1996, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company,
or in series of the DFA Investment Trust Company, a Delaware business trust,
or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, all of which Dimensional Fund
Advisors Inc. serves as investment manager. Dimensional disclaims beneficial
ownership of all such shares.
(3) The Williamson-Dickie Manufacturing Company owns 5,496,096 shares of
Blessings' common stock outstanding. Mr. J. Donovan Williamson owns 3,632
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 3,600
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. Birnbaum, 1,000; Mr. Durboraw,
5,200; Mr. Harkins, 1,000; Mr. Hudson, 7,000; Mr. Luke, 20,400; Mr.
McMackin, 1,000; Dr. Miller, 29,000; Mr. Patton, 1,000; Mr. Weber, 1,000;
Mr. J.D. Williamson, 1,000; Mr. P.C. Williamson; 1,000 all directors and
executive officers as a group (17 persons), 81,300.
3
<PAGE>
(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 10,125,721 shares of common stock issued and
outstanding on March 12, 1997. 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 800 shares held as
custodian for a child and two grandchildren.
(8) Reporting person disclaims beneficial ownership of 276,000 shares held by
father and brother.
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
eight (8) meetings of the board and twelve (12) meetings of committees of the
board in the fiscal year ended December 31, 1996. The overall attendance at
these meetings was 97%. All members of the board attended at least 75% of the
meetings of the board and committees on which they served.
Committees of the Board of Directors
The board has seven (7) standing committees: the Executive 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
three (3) times during the fiscal year ended December 31, 1996.
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 once during the fiscal year
ended December 31, 1996.
Audit Committee
The Audit Committee is comprised of three members, all of whom are
independent directors for purposes of the rules of the American Stock Exchange.
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 31, 1996.
4
<PAGE>
Compensation Committee
The Compensation Committee consists of four members, all of whom are
"non-employee directors" for purposes of Securities and Exchange Commission Rule
16b-3 and "Outside Directors" for purposes of Section 162 (m) of the Internal
Revenue Code. The committee reviews and approves the salary and incentive
compensation recommendations made by the CEO for all senior officers and key
employees of the company. The committee determines the salary and incentive
actions appropriate for the CEO and makes reports and recommendations to the
board with respect to all compensation and employee benefit matters. In carrying
out its responsibilities, the committee from time to time engages independent
compensation consultants to provide data on compensation trends and practices to
insure that the company maintains an equitable and competitive compensation
profile.
The committee also administers the following incentive and stock plans of
the Company:
-- Blessings Corporation 1991 Stock Option Plan (1991 Option Plan).
-- Blessings Corporation 1993 Incentive Plan (1993 Incentive Plan).
-- 1993 Restricted Stock Plan for Non-Employee and Certain Other Directors
of Blessings Corporation (1993 Director Restricted Stock Plan).
-- Blessings Corporation 1993 Restricted Stock Plan for Key Employee (1993
Key Employee Restricted Stock Plan).
-- 1995 Non-Employee Directors Stock Option Plan (1995 DSOP).
The committee will also administer the 1997 Long-Term Incentive Plan if
approved by shareholders at the Annual Meeting. The committee met four (4) times
during fiscal year ended December 31, 1996.
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 31, 1996.
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
did not meet during the fiscal year ended December 31, 1996.
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 31, 1996.
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 is $900 and the fee for
any subsequent meetings on the same date is $450. Committee chairmen
receive an additional fee which varies depending upon the committee
served as follows: Compensation Committee, $4,000 per year;
5
<PAGE>
Audit Committee, $2,000 per year; Nominating Committee, $1,000 per
year; Long Range Planning Committee, $1,000 per year; Organization
Development Committee and Investor Relations 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. John McMackin, in his dual 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 May 21, 1996. 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 "1993 Director Restricted Stock Plan") as
recommended by the committee to the Board of Directors. The Committee
believes that the 1993 Director Restricted 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 22, 1996, in accordance with the 1993 Director Restricted Stock
Plan, the Board granted 3,000 shares of Blessings Corporation common
stock to the Chairman and 400 shares to the Vice Chairman and each of
the other non-employee directors.
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 "1995 DSOP"). At the annual meeting of
shareholders held on May 21, 1996, the shareholders approved the 1995
DSOP as recommended by the Board of Directors. In accordance with the
provisions of the 1995 DSOP, each non-employee director 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. Except for
certain conditions relating to death, disability or retirement, each
option expires five years from the date of grant. The Company believes
the 1995 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
encourages the highest level of Directors' performance by providing
Directors with a proprietary interest in the Company's financial
success and growth.
Directors' Stock Ownership Guidelines
-- 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>
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>
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
company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
--------------------------------
Awards
----------------------- Payouts All
Annual Compensation Restricted -------- Other
------------------------ 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 1996 $111,500 $ 43,173 -0- 1,500/450 $ 540 $ 13,922
Controller 1995 105,200 50,370 -0- -0- 4,708 12,032
1994 105,200 42,082 $ 6,165 3,000/900 24,798 4,620
Kenneth J. Hudson 1996 105,423 43,882 -0- 2,000/600 -0- 4,421
Vice President, Human Resources 1995 100,000 39,774 -0- 3,000/900 -0- 3,646
1994 92,308 30,000 -0- 4,000/1,200 -0- 1,993
James P. Luke 1996 237,600 82,799 -0- 25,000/0 1,120 31,707
Executive Vice President 1995 219,100 94,414 -0- 5,000/1,500 9,817 25,922
Chief Financial Officer 1994 219,100 87,647 22,887 8,000/2,400 51,732 4,620
Elwood M. Miller 1996 289,000 100,711 -0- 25,000/0 107,163 65,381
President and 1995 262,500 113,116 -0- 10,000/3,000 136,744 67,586
Chief Executive Officer, Blessings 1994 237,500 118,763 27,185 10,000/3,000 176,109 4,620
Manuel Villarreal G. (4) 1996 147,885 92,500 -0- -0- -0- -0-
President and 1995 96,272 74,000 -0- -0- -0- -0-
Chief Executive Officer, NEPSA 1994 72,114 53,609 8,684 -0- -0- -0-
</TABLE>
- ---------------------------
(1) Cash amounts awarded under the 1993 Incentive Plan for the respective fiscal
years.
(2) In accordance with the terms of the 1993 Incentive Plan, stock is awarded,
if at all, at a market price determined as the average price during the last
three trading days of the particular fiscal year. The per-share stock price
used in determining common shares earned was $14.167 for fiscal 1994.
(3) Amounts included in all other compensation for fiscal years 1996, 1995 and
1994 respectively include company matching contributions to the 401(k)
savings plan: in 1996 of $4,500 for Mr. Durboraw; $4,421 for Mr. Hudson;
$4,500 for Mr. Luke; $4,500 for Dr. Miller; in 1995 of $4,620 for Mr.
Durboraw; $3,646 for Mr. Hudson; $4,620 for Mr. Luke; $4,620 for Dr. Miller
and in 1994 of $4,620 for Mr. Durboraw; $1,993 for Mr. Hudson; $4,620 for
Mr. Luke; $4,620 for Dr. Miller. The remaining amounts for the named
officers represent accruals to the Supplemental Executive Retirement Plan.
(4) Sr. Villarreal 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 1996. The second
table in this section shows value of exercised and unexercised options.
Option/SAR Grants Table
Option/SAR Grants in the Year Ended 12/31/96
<TABLE>
<CAPTION>
Potential
Individual Grants Realizable Value
--------------------------------------------------- At Assumed
% of Total Annual Rates of
Options/SARs Stock Price
Granted to Appreciation
Employees Exercise For Option Terms
Options/SARs in Fiscal Price Expiration ----------------
Name Granted Year $/Share Date 5% - $ 10% - $
- ------------------------ ------------ ---------- ------- ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Wayne A. Durboraw 1,500/450 1.9%/5.5% 10.875 7/7/06 10,259 25,998
Kenneth J. Hudson 2,000/600 2.5%/7.3% 10.875 7/7/06 13,678 34,664
James P. Luke 25,000/-0- 32.2%/-0- 9.25 2/26/96 -0- -0- (1)
Elwood M. Miller 25,000/-0- 32.2%/-0- 9.25 2/26/96 -0- -0- (1)
</TABLE>
- ---------------------------
(1) Options were granted subject to immediate exercise. Options were exercised
on February 23, 1996.
Option/SAR Exercises and Year-End Value Table
<TABLE>
<CAPTION>
$ Value of Unexercised
Number of Unexercised In-the-Money Options/SARs
Shares Options/SARs at 12/31/96 at 12/31/96
Acquired On Value ----------------------------- -----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------ ----------- -------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Wayne A. Durboraw -0- -0- 5,200/1,560 1,500/450 1,100/330 -0-
Kenneth J. Hudson -0- -0- 7,000/2,100 2,000/600 -0- -0-
James P. Luke 25,000 -0- 20,400/6,120 -0- 3,700/1,110 -0-
Elwood M. Miller 25,000 -0- 29,000/8,700 -0- -0- -0-
</TABLE>
8
<PAGE>
The Blessings Corporation Employees' Pension Trust Plan (the "Pension
Plan"), the Cost Recovery Supplemental Retirement Income Plan (the "SERP") and
the Employees' Defined Contribution 401(k) Savings Plan (the "401(k) Plan") are
available only to domestic United States employees of Blessings Corportion and
its divisions, and not to employees of its 60% owned subsidiary NEPSA.
Employee Pension Trust Plan
The Blessings Corporation Employees' Pension Trust Plan (the "Pension
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 Pension Plan defines annual earnings as taxable earnings plus any
401(k) deferrals of the employee. While the Pension 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 (the "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 Code. The Restoration Plan covers all employees of Blessings Corporation
who are participants in the Pension 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
Restoration Plan, when added to the benefits earned under the Pension Plan
exceed total benefits calculated under the Pension 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 Annual Benefit Upon Retirement
During the Highest Five With Years of Service Indicated
Consecutive Years of the --------------------------------------------------------
Final Ten Years of Service 15 Years 20 Years 25 Years 30 Years 35 Years
- ----------------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000............................................. $ 18,185 $ 24,246 $ 30,310 $ 36,371 $ 42,431
200,000............................................. 37,686 50,246 62,813 75,373 87,932
300,000............................................. 57,187 76,246 95,315 114,374 133,433
400,000............................................. 76,688 102,246 127,818 153,376 178,934
500,000............................................. 96,189 128,246 160,321 192,378 224,435
600,000............................................. 115,690 154,246 192,823 231,380 269,936
</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 Pension Plan.
Cost Recovery Supplemental Retirement Income Plan
Effective January 1, 1980, Blessings established a Cost Recovery
Supplemental Retirement Income Plan (the "SERP"). The SERP is an unfunded,
non-qualified 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 SERP 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 Pension Plan, and 100% of benefits payable under the
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 SERP 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 SERP is
9
<PAGE>
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, $20,687;
Mr. Luke, $56,578; and Dr. Miller, $128,721.
Employees' Defined Contribution 401(k) Savings Plan
The Company maintains a Defined Contribution 401(k) Savings Plan (the
"401(k) Plan") for all employees. Under the terms of the 401(k) 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 $9,500 during 1996. 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 401(k) Plan with the Company's contribution not to exceed a maximum of
3% of the employee's earnings. The 401(k) 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., international equity fund. For the
year ended December 31, 1996, the Company's matching contributions to the 401(k)
Plan totaled $378,241. Blessings' aggregate contributions under the 401(k) 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, $13,740; Mr. Hudson, $10,060; Mr. Luke, $13,740; Dr. Miller, $13,740;
all current executive officers as a group, $89,460; and all other employees,
excluding current executive officers as a group, $1,015,530.
Transactions With Management and Others
Pursuant to the provisions of the 1991 Option Plan and further subject to
the provisions of the Blessings Corporation 1996 Executive Stock Loan Purchase
Program (the "1996 Program"), the Company has guaranteed personal loans in the
amount of $231,250 each, undertaken by Dr. Elwood M. Miller and Mr. James P.
Luke with a major financial institution with interest at the prime rate minus
0.25% in order for them 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 3, 1997:
<TABLE>
<CAPTION>
Executive Officer February 3, 1997
- ------------------------------------------------ -----------------
<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 Company's common stock with the cumulative total return of the American
Stock Exchange Market Index and a Plastics Industry Peer Group comprised of
sixty-nine (69) public companies identified by SIC Codes 3080-3089 with annual
sales of less than $1 billion. Interested shareholders may obtain a copy of the
listing of this Plastic Industry Peer Group by contacting the Controller,
Blessings Corporation. The comparison assumes $100 was invested on December 31,
1991, 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 31, 1996
[GRAPHIC]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Blessings Corporation 100 100 135 163 123 114
American Exchange Market 100 101 121 110 139 148
Plastics Peer Group 100 119 130 143 177 223
</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 and growth in earnings
performance objectives to create a results oriented environment;
-- Provides longer-term incentive for the appreciation of shareholder
value by offering equity ownership in the Company through the stock
award component of the 1993 Incentive Plan, through stock option awards
and through the Executive Stock Loan Purchase Program which encourages
key employees to purchase Blessings common stock.
-- 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 concluded that, of the positions evaluated, half 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 have provided the basis for compensation decisions regarding the
thirteen positions throughout the ensuing year.
-- On May 21, 1991, shareholders approved the 1991 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.
The1991 Option 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. All remaining shares available under the 1991 Option
Plan were granted during 1996.
In order to maintain the incentives provided by the fully-granted 1991
Option Plan, the Board of Directors has recommended approval of the 1997
Long-Term Incentive Plan which provides for additional stock option grants of
the Company's common stock in an amount of up to 150,000 shares. (See Item No.
2, page 17)
-- On May 18, 1993, shareholders approved the 1993 Incentive Plan for Key
Employees (the "1993 Incentive Plan"). The 1993 Incentive 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
12
<PAGE>
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 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.
In each of the fiscal years 1995 and 1996, application of the
performance modifier reduced the awards otherwise earned by Dr. Miller
and Mr. Luke by 10%.
For 1995, the Committee authorized the introduction of a discretionary
component to the 1993 Incentive Plan formula. This modification provides for a
25% increase or decrease of 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 on assets formula.
Other:
-- Pursuant to the terms of the 1991 Option Plan, the Committee granted
stock options totaling 77,500 shares to twenty-eight key individuals in
1996.
-- Regarding the Committees' 1993 agreement with Dr. Miller for
compensation forfeited upon leaving his former employer (1993 Key
Employee Restricted Stock Plan), Dr. Miller was issued 25,094* shares,
of which 11,050 shares vested on November 15, 1994, 7,938 shares vested
on November 15, 1995, 4,488 shares vested on November 15, 1996 and
1,618 will vest on November 15, 1997
* After effect of 2 for 1 stock split paid 12/15/94.
-- 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.
13
<PAGE>
The CEO's salary increase in fiscal year 1996 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 25,000 shares under the 1991 Option
Plan in fiscal year 1996, subject to immediate exercise. Dr. Miller exercised
his option in full, acquiring 25,000 shares of Blessings common stock at a price
of $9.25 per share on February 23, 1996 -- (See "Transactions with Management
and Others", page 10).
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; Robert E. Weber (Chairman); Philip C. Williamson.
The preceding "Stock Performance Chart" and "Compensation Committee Report
on Executive Compensation" shall not be deemed to be soliciting material or to
be filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended, or
incorporated by reference in any documents so filed.
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, and
all have consented to serve if elected. 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 3, 1997, 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, 78, 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
</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>
Joseph J. Harkins, 65, 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, New York, New York and Monticello Insurance Company,
New York, New York. Mr. Harkins is Chairman of the Audit Committee and a
member of the Compensation, Long Range Planning and Nominating Committees
of the Board of Directors. (2)........................................... 1972 11,234
John M. Hogg, 64, President, Chief Executive Officer and a director of the
Sid Richardson Carbon & Gas Co., Fort Worth, Texas; a director of
Williamson-Dickie Manufacturing Company, Fort Worth, Texas and a director
since February 4, 1997 of the Board of Directors......................... 1997 2,000
James P. Luke, 54, Executive Vice President, Chief Financial Officer and
Secretary 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 62,875
John W. McMackin, 66, Shareholder 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 Committee of the Board of Directors. (3)....... 1977 21,042
Elwood M. Miller, 52, 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 77,894(4)
Richard C. Patton, 34, President of Trident Partners LP, 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 2,200
Manuel Villarreal G., 44, 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(5)
Robert E. Weber, 66, Chairman and Retired Chief Executive Officer of Osmose
Wood Preserving, Inc., Buffalo, New York. Mr. Weber is a member of the
Executive, and Chairman of the Compensation and Organization Development
Committees of the Board of Directors..................................... 1989 11,100
</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>
J. Donovan Williamson, 60, Consultant to and Director of Williamson-Dickie
Manufacturing Company, Fort Worth, Texas; Vice President and a Director
of Williamson Industries, Ltd.; President of JDW, Inc., an investment
company, Fort Worth, Texas. Mr. Williamson is Vice Chairman of the
Executive Committee and Chairman of the Nominating Committee of the Board
of Directors............................................................. 1973 5,500,728(6)
Philip C. Williamson, 35, Chairman, President, Chief Executive Officer and
a director of Williamson-Dickie Manufacturing Company, Fort Worth, Texas.
Mr. Williamson is a member of the Executive, Long Range Planning,
Compensation and Organization Development Committees of the Board of
Directors (7)............................................................ 1990 5,500,696(6)
</TABLE>
- ---------------------------
(1) Amounts shown include shares subject to options that are exercisable within
sixty days for the named directors as follows: Mr. Leonard Birnbaum, 1,000;
Mr. Joseph Harkins, 1,000; Mr. Luke, 20,400; Mr. John McMackin, 1,000; Dr.
Miller, 29,000; Mr. Richard Patton, 1,000; Mr. Robert Weber, 1,000; Mr. J.D.
Williamson, 1,000; Mr. Phillip Williamson, 1,000.
(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) Mr. John W. McMackin is a shareholder in 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.
(4) Reporting person disclaims beneficial ownership of 800 shares held as
custodian for a child and for two grandchildren.
(5) Reporting person disclaims beneficial ownership of 276,000 of the shares
held by father and brother.
(6) The Williamson-Dickie Manufacturing Company owns 5,496,096 shares (54%) of
Blessings' common stock outstanding. Mr. J. Donovan Williamson owns 3,632
shares and Mr. Philip C. Williamson owns 3,600 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 5,499,728 shares (54.3%) and Mr. Philip C.
Williamson owns 5,499,696 shares (54.3%) of the outstanding common stock of
Blessings.
(7) Mr. Philip C. Williamson is the nephew of Mr. J. Donovan Williamson.
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
APPROVAL OF THE 1997 LONG-TERM INCENTIVE PLAN
1997 Long-Term Incentive Plan
The Company's shareholders are being asked to approve the Blessings
Corporation 1997 Long-Term Incentive Plan ("Plan") that was adopted by the Board
of Directors of the Company on March 12, 1997, subject to shareholder approval.
At the Annual Meeting, the following resolution will be offered for shareholder
approval:
RESOLVED, that the Blessings Corporation 1997 Long-Term Incentive Plan as
approved by the Board of Directors and as attached to the Proxy Statement be and
hereby is approved.
The following description is a summary of the key features of the Plan and
is qualified in its entirety by reference to the Plan, a copy of which is
attached to this Proxy Statement as Exhibit A.
Objectives; Eligible Participants
The objective of the Plan is to attract and retain dedicated and loyal
employees and directors of outstanding ability, to stimulate the efforts of such
persons in meeting the Company's objectives and to encourage ownership of the
Company's Common Stock by employees and directors. The Company believes that
these objectives would be accomplished by making awards of options to buy the
Company's Common Stock under the Plan, thereby providing participants with a
proprietary interest in the growth and performance of the Company. Participants
shall be limited to (i) those officers and other key employees of the Company,
including employee-directors, who are in positions in which their decisions,
actions and efforts significantly contribute to the success of the Company; and
(ii) directors of the Company that are not employees of the Company. The Company
currently has eight non-employee directors and approximately twelve employees
that are eligible participants under the Plan.
Shares Available
The number of shares of Common Stock of the Company for which awards may be
granted under the Plan may not exceed, in the aggregate, 150,000 shares of
Common Stock. Common Stock related to awards that are forfeited, terminated,
expire unexercised, or are settled in such a manner that all or some of the
shares of Common Stock covered by an award under the Plan are not issued to a
participant shall become immediately available for awards under the Plan. In the
event of any change in the outstanding Common Stock of the Company by reason of
a stock dividend or distribution, recapitalization, merger, consolidation,
split-up, combination, exchange of shares or the like, in which the number of
shares held by shareholders of the Company prior to such event is affected by
such event, then the number of shares of Common Stock which may be issued under
the Plan, as well as shares issuable pursuant to outstanding awards, shall be
adjusted appropriately.
Administration of the Plan
The Plan is administered and interpreted by the Compensation Committee of
the Board of Directors ("Committee"). A person may serve on the Committee only
if he or she satisfies the requirements of a "non-employee director" for
purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and satisfies the requirements of an "outside director" for
purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"). The Committee has full and final authority in its discretion: (i) to
make and adopt rules and regulations for the administration of the Plan; (ii) to
conclusively interpret the provisions of the Plan and to decide all questions of
fact arising in its application; (iii) to determine the participants to whom
awards shall be made under the Plan; (iv) to determine the type of award to be
made and the amount, size and terms of each such award; (v) to determine the
time when awards will be granted; (vi) to prescribe from time to time the form,
and the terms, provisions and conditions not inconsistent
17
<PAGE>
with the Plan of any award agreement; and (vii) to make all other determinations
necessary or advisable for the administration of the Plan. The Committee may
designate persons other than its members to carry out its responsibilities under
such conditions or limitations as it may set, other than its authority with
regard to benefits granted to employees who are officers or directors of the
Company for purposes of Section 16 of the Exchange Act.
Forms and Provisions of Awards
The Committee may grant from time to time long term incentive awards under
the Plan in the form of non-qualified stock options or incentive stock options,
separately or in combination, as it deems appropriate, and in the best interest
of the Company under the circumstances; provided, however, that under the
provisions of the Code only employee-participants are eligible to receive awards
of incentive stock options. Payment for Company Common Stock acquired through
exercise of a non-qualified stock option or an incentive stock option may be
made in cash or, unless the Committee determines otherwise, at or prior to the
time of exercise, Company Common Stock at a fair market value as determined
pursuant to the Plan, or a combination of cash and Common Stock. A further
description of the Plan's provisions concerning the various forms of awards
under the Plan is set forth below.
Incentive Stock Options. Only participants that are employees of the
Company are eligible to receive awards of incentive stock options. The option
price of incentive stock options in the period during which each incentive stock
option can be exercised is fixed by the Committee, but in no case can the price
be less than 100% of the fair market value of the shares at the time the
incentive stock option is granted. Under the Plan, no incentive stock option can
be exercised later than ten years after the date of grant. In the event that a
participant ceases to be an employee of the Company for any reason other than
death, disability, retirement or involuntary separation without cause, all
incentive stock options granted to such participant will lapse unless otherwise
determined by the Committee. In the event employment ceases because a
participant retires or is involuntarily separated without cause, prior to
expiration of the participant's incentive stock option without the participant
having fully exercised such incentive stock option, the participant shall have
the right to exercise the incentive stock option during its term within a period
of three months after the date employment so ceased to the extent that the
incentive stock option was exercisable on the date employment ceased. In the
event employment ceases because a participant dies or suffers a disability,
prior to expiration of the participant's incentive stock option, without having
fully exercised such incentive stock option, the participant (or the estate of
the participant, or any person to whom the incentive stock option may have been
transferred by a will or by the laws of descent and distribution) shall have the
right to exercise the incentive stock option during its term within a period of
one year after the date employment so ceased, to the extent that the incentive
stock option was exercisable on the date employment ceased.
Non-Qualified Stock Options. The option price of non-qualified stock
options and the period during which each non-qualified stock option can be
exercised is fixed by the Committee, but in no case can the price be less than
100% of the fair market value of the shares at the time the option is granted.
Under the Plan, no non-qualified stock option can be exercised later than ten
years after the date of grant. In the event that an employee-participant ceases
to be an employee of the Company for any reason other than death, disability,
retirement, or involuntarily separation without cause, all non-qualified stock
options granted to such participant shall lapse forthwith or at such other times
as determined by the Committee. In the event employment ceases because an
employee-participant dies, retires, or suffers a disability, or is involuntarily
separated without cause, prior to expiration of the participant's non-qualified
stock option without the participant having fully exercised such non-qualified
stock option, the participant (or the estate of the participant, or any person
to whom the option may have been transferred by a will or by the laws of descent
and distribution) shall have the right to exercise the non-qualified stock
option during its term within a period of three months after the date employment
so ceased, to the extent the non-qualified stock option was exercisable on the
date employment ceased. With respect to participants that are directors but not
employees of the Company, any non-qualified stock option granted to such
director-participant shall automatically vest on account of death, disability or
retirement. In the event such a director-participant ceases to be a member of
the Board of Directors of
18
<PAGE>
the Company for any other reason, any non-qualified stock option which has not
vested on the date of termination shall thereafter cease to be available under
the non-qualified stock option and shall be forfeited by the director.
Change of Control
If there is a "change of control" of the Company, all outstanding stock
options granted under the Plan shall become exercisable immediately prior to the
consummation of the change of control. A change of control of the Company shall
be deemed to have occurred upon the happening of any of the following events:
(i) if Williamson-Dickie Manufacturing Company becomes the "beneficial owner"
(as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
securities of the Company representing less than fifty and one-one hundredth
percent (50.01%) of the combined voting power of the Company's then outstanding
securities; or (ii) upon the approval by the Company's shareholders of a sale or
disposition of all or substantially all of the Company's assets or a plan of
liquidation or dissolution of the Company.
Term of Plan; Amendments; Termination
The Plan became effective on March 12, 1997, subject to approval of the
Plan by the Company's shareholders. The Plan remains in effect until all awards
under the Plan have been satisfied, but no award may be granted more than ten
years after the effective date of the Plan. The Board of Directors may amend,
alter, suspend or terminate the Plan or the Committee's authority to grant
awards under the Plan, except that any such amendment, alteration, suspension or
termination shall be subject to the ratification or approval of the Company's
shareholders, if such shareholder ratification or approval is required by any
federal or state law or regulation, including without limitation Section 162(m)
of the Code and Rule 16b-3 under the Exchange Act, or the rules of any stock
exchange or automated quotation system on which the Common Stock of the Company
may then be listed or quoted, or if the Board otherwise in its discretion
determines for any other reason to submit such changes to the Plan to
shareholders for approval or ratification. The amendment, alteration, suspension
or termination of the Plan shall not, without the consent of a participant,
affect the participant's rights under an award previously granted.
Federal Income Tax Consequences
Grants of Options. The grant of a non-qualified stock option or incentive
stock option does not result in income for the grantee or in a deduction for the
Company.
Exercise of Options. The exercise of a non-qualified stock option results
in ordinary income for the optionee and a deduction for the Company measured by
the difference between the option price and the fair market value of the shares
received at the time of exercise. Income tax withholding is required.
The exercise of an incentive stock option does not result in income for the
optionee. However, the excess of the fair market value on the exercise date over
the option price of the shares is an "item of adjustment" for alternative
minimum tax purposes. When an optionee sells shares acquired by exercise of an
incentive stock option, the optionee's gain (the excess of sales proceeds over
option price) upon the sale will be taxed as capital gain, provided the optionee
(i) exercises the option while an employee of the Company or a subsidiary or
within three months after termination of such employment for reason other than
death or disability and (ii) the sale is not within two years after the date of
grant nor within one year after the transfer of shares upon exercise. If the
exercise is after such three month period, or the subsequent sales before the
expiration of either the two year or the one year period, the optionee generally
will realize ordinary income in the year of exercise or the disqualifying sale.
Subsequent Sales. A sale of shares of the Company's Common Stock more than
one year after their receipt will result in long-term gain or loss to the
holder.
The foregoing does not constitute tax advice by the Company. If desired,
shareholders and participants in the Plan should consult their own tax advisers
regarding the tax consequences of grants and exercises of awards under the Plan.
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Option Limitations
For compensation in excess of $1,000,000 realized by any of the Company's
executive officers named in the Summary Compensation Table to be deductible by
the Company, IRS Regulations under Section 162(m) of the Code require any stock
option plan to state the maximum number of options that can be granted to an
individual participant during a fiscal year. The Plan has a limit of 10,000
options per participant per fiscal year.
Stock Loan Purchase Program
In connection with the Plan, the Company's Board of Directors has adopted a
Loan Purchase Program ("Loan Program"). To be eligible to participate in the
Loan Program, an individual must have been granted options pursuant to the Plan.
Upon an exercise of options, a participant in the Loan Program is required to
deliver in cash 100% of the exercise price of the shares with respect to the
stock options within five days after the exercise date. In return, the Company
arranges the opportunity for each participant to obtain a loan through a bank
("Bank") to fund the purchase of the option shares. Each participant is
responsible for satisfying all of the lending requirements specified by the Bank
to qualify for the loan and each participant is fully obligated to repay to the
Bank all principal, interest and any prepayment fees on the loan when due and
payable. In turn, the Company guarantees repayment to the Bank of 100% of all
the obligations of each participant under such loans.
The Board of Directors believes that stock options are a competitive
necessity to attract and retain employees and directors with the skill,
intelligence, education and experience on whose success the Company is largely
dependent. The Company believes that stock options are appropriate and effective
methods to compensate employees and directors because they foster proprietary
identification with the Company and encourage them to exert maximum efforts for
its success.
The Board of directors recommends a vote FOR approval of the Company's 1997
Long-Term Incentive 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 31, 1996, and is planning to
reappoint the firm for the 1997 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 31, 1996, and intends to reappoint
the firm for the 1997 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.
Section 16(a) Beneficial Ownership Reporting Compliance
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
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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 Reporting Persons complied on a
timely basis with all filing requirements applicable to them with respect to
transactions during fiscal 1996, except that (i) Mr. J.D. Williamson filed a
Form 4 late with regard to the purchase of 1,000 shares in February 1996, (ii)
Mr. Joseph Lesnowski and Mr. Michael Carlson each filed a Form 3 one month late
on becoming officers of the Company, (iii) Mr. Manuel Villarreal G. filed a Form
4 late with regard to a derivative security for 817 shares awarded in 1995, and
(iv) Dr. Elwood M. Miller filed a Form 4 late reporting 300 shares acquired in
custodial accounts for a child and two grandchildren. Upon discovery of these
oversights all of the transactions were correctly reported.
Submission of Shareholder Proposals
for The 1998 Annual Meeting of Shareholders
Any shareholder proposal submitted for inclusion in the proxy statement and
form of proxy for the 1998 Annual Meeting of Shareholders must be received at
Blessings' principal executive offices in Newport News, Virginia, on or before
December 13, 1997.
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 31, 1996, 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
Chief Financial Officer,
Secretary
Newport News, Virginia
April 11, 1997
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EXHIBIT A
BLESSINGS CORPORATION
1997 LONG-TERM INCENTIVE PLAN
1. OBJECTIVES.
The Company has established the Plan as an incentive to attract and retain
dedicated and loyal employees and directors of outstanding ability, to stimulate
the efforts of such persons in meeting the Company's objectives and to encourage
ownership of the Company's common stock by employees and directors.
2. DEFINITIONS
2.1 "Award" shall mean the grant of any form of stock option to a Plan
Participant pursuant to such terms, conditions, performance requirements, and
limitations as the Committee may establish in order to fulfill the objectives of
the Plan.
2.2 "Award Agreement" shall mean an agreement between the Company and a
Participant that sets forth the terms, conditions, performance requirements, and
limitations applicable to an Award.
2.3 "Board" shall mean the board of directors of the Company.
2.4 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
2.5 "Committee" shall mean the Compensation Committee of the Board, which
for purposes of making Awards under this Plan shall be comprised solely of two
or more directors that are (i) Non-Employee Directors and (ii) Outside
Directors.
2.6 "Company" shall mean Blessings Corporation, a Delaware corporation,
and its subsidiaries, including subsidiaries of subsidiaries.
2.7 "Disability" shall mean any medically determinable physical or mental
impairment rendering an individual unable to engage in any substantial gainful
activity, which disability can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than 12
months.
2.8 "Early Retirement" for employee participants, shall mean retirement
from active employment with the Company pursuant to the early retirement
provisions of the Company's pension plan. For director participants who are not
employees, "Early Retirement" shall mean retirement from membership on the Board
with the consent of the Committee.
2.9 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
2.10 "Fair Market Value" shall mean the average of the high and low prices
of a share of common stock of the Company on the American Stock Exchange
Composite Reporting Tape for the date in question, provided that, if no sales of
a share of common stock were made on the American Stock Exchange on that date,
the average of the high and low prices of the common stock as reported for the
most recent preceding day on which sales of common stock were made on the
American Stock Exchange.
2.11 "Involuntary Separation without Cause" shall mean a termination of
employment by the Company for reasons other than substantial failure to perform
duties, material violation of Company policies, unethical activities,
misconduct, fraud, or commission of an illegal act; provided that, Involuntary
Separation without Cause does not include a resignation or a voluntary
separation from employment, in either case initiated by a Participant.
2.12 "Non-Employee Director" shall have the meaning given that term under
Rule 16b-3(b)(3) as promulgated by the SEC pursuant to the Exchange Act, or any
successor rule.
2.13 "Outside Director" shall have the meaning given that term under Code
Regulation (section mark) 1.162-27(e)(3)(i), or any successor regulation.
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2.14 "Participant" shall mean an employee of the Company or a member of the
Board, including directors that are not employees of the Company, to whom an
Award has been made under the Plan; provided, however, that in Section 8 of the
Plan the meaning of the term Participant shall be limited to employees of the
Company to whom an award of an incentive stock option has been made.
2.15 "Plan" shall mean the Blessings Corporation 1997 Long-Term Incentive
Plan.
2.16 "Retirement" or "Retires" shall mean (i) cessation of active services
as an employee, or for directors who are not employees of the Company, as a
member of the Board, at or after age 65, or (ii) Early Retirement.
2.17 "SEC" shall mean the Securities and Exchange Commission.
3. EFFECTIVE DATE AND DURATION OF THE PLAN.
The effective date of the Plan is March 12, 1997, subject to approval of
the Plan by the shareholders of the Company at the Company's annual meeting of
shareholders to be held on May 20, 1997, or any adjournment thereof. The Plan
shall remain in effect until all Awards under the Plan have been satisfied by
the issuance of shares, but no Award shall be granted more than ten years after
the effective date of the Plan.
4. CAPITAL STOCK AVAILABLE FOR AWARDS.
Subject to adjustment as provided in Section 14, the number of shares of
common stock of the Company for which Awards may be granted under the Plan shall
not exceed 150,000. As soon as possible after adoption of the Plan by the
Company's shareholders, the Company shall take whatever actions are necessary to
file required documents with the SEC and any other appropriate governmental
authorities and stock exchanges to make shares of stock available for issuance
pursuant to Awards. Stock related to Awards that are forfeited, terminated,
expire unexercised, or are settled in such a manner that all or some of the
shares covered by an Award under this Plan are not issued to a Participant shall
become immediately available for Awards under this Plan.
5. ADMINISTRATION.
5.1 The Plan shall be administered and interpreted by the Committee. The
Committee shall have full and final authority in its discretion: (i) to make and
adopt rules and regulations for the administration of the Plan; (ii) to
conclusively interpret the provisions of the Plan and to decide all questions of
fact arising in its application; (iii) to determine the Participants to whom
Awards shall be made under the Plan; (iv) to determine the type of Award to be
made and the amount, size and terms of each such Award (including, but not
limited to, any exercise price, grant price, or purchase price, any restriction
or condition, any schedule for lapse of restrictions or conditions relating to
transferability or forfeiture, exercisability, or settlement of an Award, and
waivers or accelerations thereof, based in each case on such conditions as the
Committee shall determine); (v) to determine the time when Awards will be
granted; (vi) to prescribe from time to time the form, and the terms, provisions
and conditions not inconsistent with the Plan, of any Award Agreement; and (vii)
to make all other determinations necessary or advisable for the administration
of the Plan. The Committee may designate persons other than its members to carry
out its responsibilities under such conditions or limitations as it may set
other than its authority with regard to benefits granted to employees who are
officers or directors of the Company for purposes of Section 16 of the Exchange
Act.
5.2 No member of the Committee shall be liable for any action or
determination taken or made in good faith with respect to the Plan or any Award
made hereunder, and to the extent permitted by law, all members of the Committee
shall be indemnified by the Company for any liability and expenses which may be
incurred through any claim or cause of action.
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6. ELIGIBILITY.
Participants shall be limited to (i) those officers and other key employees
of the Company who are in positions in which their decisions, actions and
efforts significantly contribute to the success of the Company, and (ii)
directors of the Company, including directors that are not employees of the
Company; provided, however, that only employee-Participants shall be eligible to
receive grants of incentive stock options pursuant to Section 8 of the Plan.
7. AWARDS UNDER THE PLAN.
The Committee shall determine the type or types of Awards to be made to
each Participant and shall set forth in each Award Agreement the terms,
conditions, and limitations applicable to each Award. Awards may be granted
singly, in combination or in tandem. Awards may also be made in combination or
in tandem with, in replacement of, or as alternatives to, grants or rights under
any other option or incentive plan of the Company, including the plan of any
acquired entity. Where both an incentive stock option and a non-qualified stock
option are awarded at one time, such options shall be deemed to have been
awarded in separate grants, shall be clearly identified, and in no event will
the exercise of one such option affect the right to exercise the other such
option.
8. INCENTIVE STOCK OPTIONS.
Incentive stock options, or substitutes therefor, are options to purchase
shares of common stock of the Company which, in addition to being subject to
applicable terms, conditions and limitations established by the Committee,
comply with Section 422 of the Code. Only employee-Participants shall be
eligible to receive grants of incentive stock options. Incentive stock options
shall be evidenced by Award Agreements which shall contain in substance the
following terms and conditions:
8.1 Option Price. The purchase price per share of stock deliverable upon
the exercise of an incentive stock option shall not be less than 100% of the
Fair Market Value of the stock on the day the incentive stock option is granted.
8.2 Exercise of Option. Each Award Agreement pursuant to which incentive
stock options are granted shall state the period or periods of time within which
the incentive stock option may be exercised by the Participant, in whole or in
part, which shall be such period or periods of time as may be determined by the
Committee, provided that the exercise period shall not end later than ten years
after the date of the grant of the incentive stock option.
8.3 Nontransferability. Each Award Agreement shall state that the incentive
stock option is not transferable other than by will or the laws of descent and
distribution, and during the lifetime of the Participant is exercisable only by
the Participant.
8.4 Payment for Shares. Stock purchased pursuant to an incentive stock
option shall be paid for in full in cash or, unless the Committee determines
otherwise at or prior to the time of exercise, common stock of the Company at
Fair Market Value or a combination thereof, in an amount or having a combined
value equal to the aggregate purchase price for the shares subject to the
incentive stock option or portion thereof being exercised.
8.5 Rights Upon Termination of Employment. In the event that a Participant
ceases to be an employee of the Company for any reason other than death,
Disability, Retirement or Involuntary Separation without Cause, all incentive
stock options granted to the Participant shall lapse forthwith or at such other
time as determined by the Committee. In the event employment ceases because a
Participant Retires or is Involuntarily Separated without Cause, prior to
expiration of the Participant's incentive stock option, without having fully
exercised such incentive stock option, the Participant shall have the right to
exercise the incentive stock option during its term within a period of three
months after the date employment so ceased, to the extent that the incentive
stock option was exercisable on the date employment ceased. In the event
employment ceases because a Participant dies or suffers a Disability, prior to
expiration of the Participant's incentive stock option, without having fully
exercised such incentive stock option, the Participant, or the estate of the
Participant, or
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any person to whom the incentive stock option may have been transferred by a
will or by the laws of descent and distribution, shall have the right to
exercise the incentive stock option during its term within a period of one (1)
year after the date employment so ceased, to the extent that the incentive stock
option was exercisable on the date employment ceased.
8.6 Individual Limitations.
8.6.1 Notwithstanding anything herein to the contrary, to the extent
that the aggregate Fair Market Value (determined as of the time the option
is granted) of stock for which any Participant is granted incentive stock
options that are exercisable for the first time during any calendar year
(under all such plans of the Company) shall exceed $100,000 (such excess to
be determined by taking incentive stock options into account in the order
in which granted), such incentive stock options to such extent shall be
treated as options which are not incentive stock options.
8.6.2 Notwithstanding anything herein to the contrary, no incentive
stock option shall be granted to any individual if at the time the
incentive stock option is to be granted the individual owns stock
possessing more than 10% of the total combined voting power of all classes
of stock of the Company or of any parent or subsidiary corporation unless
at the time such incentive stock option is granted the option price is at
least 110% of the Fair Market Value of the stock subject to the incentive
stock option and such incentive stock option by its terms is not
exercisable after the expiration of five years from the date such incentive
stock option is granted.
8.7 Code Compliance. Each Award Agreement pursuant to which incentive stock
options are granted shall contain such other terms, conditions and provisions as
the Committee may determine to be necessary or desirable in order to qualify
such option as an incentive stock option within the meaning of Section 422 of
the Code, or the regulations thereunder. Notwithstanding Section 15, the Board
shall have the power without further approval to amend the terms of the Plan or
any Awards or Award Agreements thereunder for such purpose.
9. NON-QUALIFIED STOCK OPTIONS.
Non-qualified stock options, or substitutes therefore, are options to
purchase shares of common stock of the Company which are not intended to comply
with Section 422 of the Code. Non-qualified stock options shall be evidenced by
Award Agreements which shall contain in substance the following terms and
conditions:
9.1 Option Price. The purchase price per share of stock deliverable upon
the exercise of a non-qualified stock option shall be not less than 100% of the
Fair Market Value of the stock on the day the non-qualified stock option is
granted, as determined by the Committee.
9.2 Exercise of Option. Each Award Agreement pursuant to which
non-qualified stock options are granted shall state the period or periods of
time within which the non-qualified stock option may be exercised by the
Participant, in whole or in part, which shall be such period or periods of time
as may be determined by the Committee at the time of grant, provided that the
exercise period shall not end later than ten years after the date of the grant
of the non-qualified stock option.
9.3 Payment for Shares. Stock purchased pursuant to a non-qualified stock
option shall be paid for in full in cash or, unless the Committee determines
otherwise at or prior to the time of exercise, in common stock of the Company at
Fair Market Value or a combination of cash and such common stock, in an amount
or having a combined value equal to the aggregate purchase price for the shares
subject to the non-qualified stock option or portion thereof being exercised.
9.4 Rights Upon Termination of Employment of Employee-Participants. In the
event that an employee-Participant ceases to be an employee of the Company for
any reason other than death, Disability, Retirement or Involuntary Separation
without Cause, all non-qualified stock options granted to such Participant shall
lapse forthwith or at such other time as determined by the Committee. In the
event employment ceases because an employee-Participant dies, Retires, suffers a
Disability, or is Involuntarily Separated without
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Cause prior to expiration of the Participant's non-qualified stock option,
without having fully exercised such non-qualified stock option, the Participant
(or the estate of the Participant, or any person to whom the option may have
been transferred by a will or by the laws of descent and distribution) shall
have the right to exercise the non-qualified stock option during its term within
a period of three months after the date employment so ceased, to the extent that
the non-qualified stock option was exercisable on the date employment ceased.
The Committee, however, in its discretion, may provide that any non-qualified
stock options outstanding but not yet exercisable upon the death, Disability,
Retirement or Involuntary Separation without Cause of the Participant may become
exercisable in accordance with a schedule to be determined by the Committee.
Such privileges shall expire unless exercised within such period of time as may
be established by the Committee.
9.5 Accelerated Vesting and Forfeiture for Non-Employee Directors. Any
other provision of this Plan notwithstanding, all shares of common stock of the
Company available under any non-qualified stock option granted to a
director-Participant that is not an employee of the Company shall automatically
vest on account of (i) death, (ii) Disability, or (iii) Retirement. In the event
a director-Participant who is not an employee of the Company ceases to be a
member of the Board for any other reason, shares of common stock of the Company
subject to a non-qualified stock option which have not vested on the date of
termination shall thereafter cease to be available under the non-qualified stock
option and shall be forfeited by the director.
9.6 Cashless Exercise. To the extent permitted under Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder by the SEC,
and with the consent of the Committee, the Company agrees to cooperate in a
"cashless exercise" of a non-qualified stock option. The cashless exercise shall
be effected by the Participant delivering to a registered securities broker
acceptable to the Company instructions to sell a sufficient number of shares of
stock to cover the costs and expenses associated therewith.
10. GENERAL RESTRICTIONS.
10.1 Conditions on Company's Obligations. The Company's obligations with
respect to each Award under the Plan shall be subject to the requirement that,
if at any time the Committee shall determine that (i) the listing, registration
or qualification of the shares of common stock subject or related thereto upon
any securities exchange or under any state or federal law, (ii) the consent or
approval of any government regulatory body, or (iii) an agreement by the
recipient of an Award with respect to the disposition of shares of common stock,
is necessary or desirable as a condition of or in connection with the granting
of such Award, such Award may not be consummated in whole or in part unless such
listing, registration, qualification, consent, approval or agreement shall have
been effected or obtained free of any conditions not acceptable to the
Committee.
10.2 Per Participant Limitation on Stock Options. Notwithstanding anything
in this Plan to the contrary, no Participant shall receive incentive stock
options and non-qualified stock options that, in the aggregate, grant the
Participant the option to purchase in excess of 10,000 shares of common stock of
the Company in any given year the Plan is in effect.
11. RIGHTS TO TERMINATE EMPLOYMENT AND BOARD MEMBERSHIP.
Nothing in the Plan or in any Award Agreement or other agreement entered
into pursuant to the Plan shall confer upon any employee-Participant the right
to continue in the employment of the Company or affect any right which the
Company may have to terminate the employment of such Participant, nor confer
upon any director the right to continue as a member of the Board. So long as an
employee-Participant shall continue to be an employee of the Company, any Award
granted to such Participant shall not be affected by any change of the
Participant's duties or position.
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12. WITHHOLDING.
Whenever the Company proposes or is required to issue or transfer shares of
common stock under the Plan, the Company shall have the right to require the
Participant to remit to the Company an amount sufficient to satisfy any federal,
state and/or local tax withholding requirements prior to the delivery of any
certificate for such shares or, in the discretion of the Committee, the Company
may withhold from the shares to be delivered shares sufficient to satisfy all or
a portion of such tax withholding requirements.
13. NON-UNIFORM DETERMINATION.
The Committee's determinations under the Plan (including without limitation
determinations of the persons to receive Awards, the form, amount and timing of
such Awards, the terms, provisions and conditions of such Awards, the agreements
evidencing same, and the establishment of values and performance targets) need
not be uniform and may be made by it selectively among Participants who receive,
or are eligible to receive, Awards under the Plan, whether or not such persons
are similarly situated.
14. ADJUSTMENTS.
In the event of any change in the outstanding common stock of the Company
by reason of a stock dividend or distribution, recapitalization, merger,
consolidation, split-up, combination, exchange of shares or the like, in which
the number of shares held by the Company's shareholders prior to such event is
affected by such event, then the Committee shall adjust the number of shares of
common stock which may be issued under the Plan and shall provide for an
equitable adjustment of any outstanding Award or the number or kind of shares
issuable pursuant to an outstanding Award under the Plan.
15. AMENDMENT.
The Board may amend, alter, suspend or terminate the Plan or the
Committee's authority to grant Awards under the Plan, except that any such
amendment, alteration, suspension or termination shall be subject to the
ratification or approval of the Company's shareholders if such shareholder
ratification or approval is required by any federal or state law or regulation,
including without limitation Section 162(m) of the Code and SEC Rule 16b-3 under
the Exchange Act, or the rules of any stock exchange or automated quotation
system on which the common stock of the Company may then be listed or quoted, or
if the Board otherwise in its discretion determines for any other reason to
submit such changes to the Plan to shareholders for approval or ratification.
The amendment, alteration, suspension or termination of the Plan shall not,
without the consent of a Participant, affect the Participant's rights under an
Award previously granted.
16. CHANGE OF CONTROL.
16.1 Notwithstanding any other provision of the Plan, if there is a Change
of Control, as defined below, of the Company, all outstanding stock options
shall become exercisable immediately prior to the consummation of the Change of
Control.
16.2 A "Change of Control" of the Company shall be deemed to have occurred
upon the happening of any of the following events:
(i) the Board of Directors determines, as a result of one or more
transactions or events, that Williamson-Dickie Manufacturing Company no
longer controls the Company; or
(ii) upon the approval by the Company's shareholders of a sale or
disposition of all or substantially all of the Company's assets or a plan
of liquidation or dissolution of the Company.
17. EFFECT ON OTHER PLANS.
Participation in the Plan shall not affect an employee's or director's
eligibility to participate in any other benefit or incentive plan of the
Company, and any Awards made pursuant to the Plan shall not be used in
determining the benefits provided under any other plan of the Company unless
specifically provided.
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18. COMPLIANCE WITH EXEMPTIVE RULES UNDER SECTION 16 OF THE EXCHANGE ACT.
It is the intent of the Company that transactions involving equity
securities under the Plan by persons subject to Section 16 of the Exchange Act
be exempt under Rule 16b-3 under the Exchange Act. Accordingly, if any provision
of the Plan or any Award Agreement does not comply with the requirements of Rule
16b-3 as then applicable to such a transaction, such provision shall be
construed or deemed amended to the extent necessary to conform to such
requirements with respect to such transaction.
19. GOVERNING LAW.
To the extent that federal laws do not otherwise control, the Plan shall be
governed by and construed in accordance with the laws of the State of Delaware.
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BLESSINGS CORPORATION
200 Enterprise Drive
Newport News, VA 23803
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Shareholders--May 20, 1997
Revoking any prior appointments, the undersigned hereby appoints James
P. Luke, John W. McMackin and Elwood M. Miller and each of them as Proxies with
full power of substitution, and hereby authorizes them to represent and to vote
as designated herein all the shares of the common stock of Blessings Corporation
held of record by the undersigned on April 4, 1997 at the Annual Meeting of
Shareholders to be held at The Williamsburg Marriott, 50 Kingsmill Road,
Auditorium, Williamsburg, Virginia on Tuesday, May 20, 1997 at 10:00 A.M.
(E.D.S.T.).
(Continued on Other Side)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
The Board of Directors recommends a vote FOR the nominees Please mark
listed in Item No. 1 and FOR Item No. 2. your vote as
indicated in
this example [X]
<TABLE>
<S> <C>
Item No. 1. ELECTION OF DIRECTORS NOMINEES: L. Birnbaum, J.J. Harkins, J.M. Hogg, J.P. Luke, J.W. McMackin,
E.M. Miller, R.C. Patton, M. Villarreal G., R.E. Weber, J.D. Williamson and
FOR all nominees WITHHOLD P.C. Williamson.
listed to the right AUTHORITY
(except as marked to vote for
to the contrary) all nominees
listed to the ----------------------------------------------------------------------------------
right INSTRUCTIONS: To withhold authority to vote for any individual nominee, write that
[ ] [ ] nominee's name in the space provided above.
Item No. 2. Proposal to approve Item No. 3. In their discretion, the Proxies THIS PROXY WHEN PROPERLY EXECUTED WILL BE
the 1997 Long-Term Incentive Plan. are authorized to vote upon such other VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED
business as may properly come before the SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
FOR AGAINST ABSTAIN meeting. PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
[ ] [ ] [ ]
Please Mark, Sign, Date and Return this Proxy
Card Promptly Using the Enclosed Envelope.
Please sign name exactly as it appears. If
joint tenants, both should sign. Give full
title if signing as attorney, executor,
administrator, trustee or guardian. If a
corporation, sign full corporate name by
authorized officer. If a partnership, sign
partnership name by authorized person.
---------------------------------------------
---------------------------------------------
Signature of Shareholders(s)
Date___________________________________, 1997
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
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