<PAGE>
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
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
LIQUI-BOX CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(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>
LIQUI-BOX CORPORATION
POST OFFICE BOX 494
WORTHINGTON, OHIO 43085-0494
TELEPHONE: (614) 888-9280
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
---------------------
To the Shareholders of
LIQUI-BOX CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of Liqui-Box Corporation ("Liqui-Box") will be held at the Columbus
Marriott North, 6500 Doubletree Avenue, Columbus, Ohio, on Wednesday, April 21,
1999, at 9:00 a.m. (local time) for the following purposes:
1. To elect four (4) directors to serve for terms of two years each.
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment(s) thereof.
A copy of the Annual Report for the 1998 fiscal year accompanies this
Notice.
By Order of the Board of Directors,
C. William McBee
SECRETARY
Dated: April 1, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE FILL IN, SIGN, DATE
AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE, TO WHICH NO POSTAGE
NEED BE AFFIXED IF MAILED IN THE UNITED STATES.
<PAGE>
LIQUI-BOX CORPORATION
POST OFFICE BOX 494
WORTHINGTON, OHIO 43085-0494
TELEPHONE: (614) 888-9280
------------------------
PROXY STATEMENT
---------------------
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Liqui-Box Corporation ("Liqui-Box") to be
used at its Annual Meeting of Shareholders (the "Annual Meeting") to be held on
April 21, 1999, and at any adjournment(s) thereof. Common shares represented by
properly executed proxies will be voted at the Annual Meeting. Where a choice is
specified by the shareholder, the proxy will be voted in accordance with such
choice. Any proxy may be revoked at any time insofar as it has not been
exercised provided notice of revocation of the proxy is received by Liqui-Box
either in writing or in open meeting.
This Proxy Statement and the accompanying proxy were first mailed to
shareholders on or about April 1, 1999.
February 24, 1999, has been fixed as the record date for the determination
of shareholders entitled to notice of and to vote at the Annual Meeting or any
adjournment(s) thereof. On the record date, 4,654,026 common shares of Liqui-Box
were outstanding and entitled to vote. The holders of common shares entitling
them to exercise a majority of the voting power of Liqui-Box will constitute a
quorum for the Annual Meeting.
Common shares represented by signed proxies that are returned to Liqui-Box
will be counted toward the quorum even though they are marked as "Withhold
Authority" in respect of the election of directors or they are not marked at
all. Broker/dealers, who hold their customers' common shares in street name,
may, under the applicable rules of the self-regulatory organizations of which
the broker/dealers are members, sign and submit proxies for such common shares
and may vote such common shares on routine matters, which, under such rules,
typically include the election of directors, but broker/dealers may not vote
such common shares on other matters, which typically include approval of
significant corporate transactions such as amendments to the articles of
incorporation or code of regulations of a corporation and the approval of stock
compensation plans, without specific instructions from the customer who owns
such common shares. Proxies signed and submitted by broker/dealers, which have
not been voted on certain matters as described in the previous sentence, are
referred to as "broker non-votes". Such proxies count toward the establishment
of a quorum.
Each shareholder is entitled to one vote for each common share held and has
cumulative voting rights in the election of directors. A shareholder wishing to
exercise cumulative voting must so notify the President, a Vice President or the
Secretary of Liqui-Box in writing not less than forty-eight hours before the
Annual Meeting. If cumulative voting is requested, each shareholder will have a
number of votes equal to the number of directors to be elected multiplied by the
number of common shares owned by him and will be entitled to distribute his
votes among the nominees as he sees fit. If cumulative voting is requested, as
described above, the enclosed proxy would grant discretionary authority to the
proxies named therein to cumulate votes and to distribute the votes among the
candidates.
1
<PAGE>
PRINCIPAL HOLDERS OF SECURITIES
The following table sets forth, as of February 24, 1999 (except as otherwise
indicated), certain information concerning the beneficial ownership of
Liqui-Box's common shares by the only persons known to Liqui-Box to own
beneficially more than five percent (5%) of the outstanding common shares of
Liqui-Box.
<TABLE>
<CAPTION>
COMMON SHARES OF
LIQUI-BOX BENEFICIALLY
OWNED(1)(2)
NAME AND ADDRESS ---------------------------
OF BENEFICIAL OWNER AMOUNT % OF TOTAL(3)
- ----------------------------------------------------------------- ---------- ---------------
<S> <C> <C>
Samuel B. Davis.................................................. 1,580,790(4) 32.8%
6950 Worthington-Galena Road
P. O. Box 494
Worthington, Ohio 43085
Fiduciary Management, Inc........................................ 284,261(5) 5.9%
225 East Mason Street
Milwaukee, Wisconsin 53202
</TABLE>
- ------------------------
(1) As of February 24, 1999, except as otherwise indicated.
(2) Sole voting and investment power, unless otherwise indicated.
(3) The percent of total is based upon the sum of 4,654,026 common shares
outstanding on February 24, 1999 and the number of common shares, if any, as
to which the named person has the right to acquire beneficial ownership upon
the exercise of presently exercisable options.
(4) Includes 100,566 common shares subject to presently exercisable options and
61,607 common shares held for the account of Mr. Davis in the Liqui-Box
Corporation Employees' Stock Ownership Plan (the "Liqui-Box ESOP").
Supplemental Retirement Discounted Options become exercisable upon
termination of employment. Under the rules of the Securities and Exchange
Commission (the "SEC"), options which become exercisable during the next 60
days are deemed to be presently exercisable options. For purposes of
determining presently exercisable options, it is assumed that Mr. Davis will
not terminate his employment with Liqui-Box during the next 60 days. Also
includes 490,113 common shares held by Mr. Davis as the Successor Trustee
under the S.S. Davis Residual Trust. Also includes 127,027 common shares
deposited with Mr. Davis in his capacity as voting trustee of a trust that
expires on September 29, 2003. Mr. Davis exercises sole voting power, but
has no investment power, with respect to the common shares deposited in the
trust. Mr. Davis holds the right of first refusal on the disposal of these
common shares. Does not include 3,028 common shares as to which the wife of
Mr. Davis has sole voting and investment power.
(5) Based on information contained in filings with the SEC dated February 3,
1999, Fiduciary Management, Inc., a registered investment adviser
("Fiduciary"), may be deemed to have sole investment power with respect to
246,461 common shares and shared investment power with respect to 37,800
common shares. Fiduciary does not have voting power with respect to any of
these common shares.
2
<PAGE>
The following table sets forth, as of February 24, 1999, certain information
with respect to Liqui-Box's common shares owned beneficially by each director of
Liqui-Box, by each nominee for election as a director of Liqui-Box, by each
executive officer of Liqui-Box named in the SUMMARY COMPENSATION TABLE and by
all current directors and executive officers of Liqui-Box as a group:
<TABLE>
<CAPTION>
COMMON SHARES OF
LIQUI-BOX BENEFICIALLY
OWNED(1)(2)(3)
----------------------------
% OF
NAME OF BENEFICIAL OWNER AMOUNT TOTAL(4)
- ----------------------------------------------------------------- ------------- ----------
<S> <C> <C>
Samuel B. Davis.................................................. 1,580,790(5) 32.8%
Robert S. Hamilton............................................... 143,597(6) 3.0%
Samuel N. Davis.................................................. 115,786(7) 2.4%
C. William McBee................................................. 51,734(8) 1.1%
Stewart M. Graves................................................ 7,500(9) 0.2%
Barry L. Pritchard............................................... 3,090(10) 0.1%
Russell M. Gertmenian............................................ 2,600(11) 0.1%
Carl J. Aschinger, Jr............................................ 1,068 0.0%
Charles R. Coate................................................. 1,056 0.0%
All current directors and executive officers as a group
(10 persons)..................................................... 1,913,471(12) 39.8%
</TABLE>
- ------------------------
(1) As of February 24, 1999. All fractional common shares have been rounded.
(2) Sole voting and investment power, unless otherwise indicated.
(3) Supplemental Retirement Discounted Options become exercisable upon
termination of employment. Under SEC rules, options that become exercisable
during the next 60 days are deemed to be presently exercisable options. For
purposes of determining presently exercisable options, it is assumed that
no current executive officer will terminate his employment with Liqui-Box
during the next 60 days.
(4) See footnote (3) to the preceding table.
(5) See footnote (4) to the preceding table.
(6) Includes 19,988 common shares subject to presently exercisable options and
1,467 common shares held for his account in the Liqui-Box ESOP. Does not
include 4,746 common shares as to which his wife has sole voting and
investment power.
(7) Includes 7,500 common shares subject to presently exercisable options and
180 common shares held for his account in the Liqui-Box ESOP. Also includes
15,750 common shares held in an indirect trust as to which he has no voting
power and shared investment power. Does not include 4,652 common shares as
to which his wife has sole voting and investment power.
(8) Includes 22,307 common shares subject to presently exercisable options and
905 common shares held for his account in the Liqui-Box ESOP.
(9) Includes 7,500 common shares subject to presently exercisable options.
(10) Includes 1,734 common shares subject to presently exercisable options and
88 common shares held for his account in the Liqui-Box ESOP.
(11) Includes 200 common shares held by his wife as to which she has sole
voting and investment power. Also includes 1,600 common shares held as
custodian for son.
3
<PAGE>
(12) Includes, as to all current directors and executive officers of Liqui-Box
as a group, 159,595 common shares subject to presently exercisable options
and 64,247 common shares held for their respective accounts in the
Liqui-Box ESOP.
ELECTION OF DIRECTORS
At the Annual Meeting, four directors will be elected to hold office until
the 2001 Annual Meeting of Shareholders and until their respective successors
are elected and qualified. It is the intention of the persons named in the
accompanying form of proxy to vote the common shares represented by such proxy
for the election of the persons named in the following table unless the proxy is
marked otherwise. In case any person named in the table is unable to serve or is
unwilling to accept nomination or election (which is not anticipated), the
persons named in the proxy will vote the common shares represented by such proxy
for one or more substitute nominees designated by the present Board of
Directors. Under Ohio law and Liqui-Box's Code of Regulations, the four nominees
for election as directors in the class whose terms expire in 2001 receiving the
greatest number of votes will be elected as directors. Common shares as to which
the voting authority is withheld will be counted for quorum purposes but will
not be counted toward the election of directors, or toward the election of
individual nominees specified on the form of proxy.
The following individuals have been nominated for election to the class of
directors whose terms expire in 2001:
<TABLE>
<CAPTION>
NAME, AGE, YEAR LIQUI-BOX POSITIONS AND OFFICES WITH LIQUI-BOX, PRINCIPAL OCCUPATION AND OTHER
DIRECTORSHIP COMMENCED DIRECTORSHIPS
- --------------------------------- -------------------------------------------------------------------------------
<S> <C>
Carl J. Aschinger, Jr............ Director of Liqui-Box; Chairman and Chief Executive Officer of The
60-1985 Columbus Showcase Company, a manufacturer of retail showcases in Columbus, Ohio
Charles R. Coate................. Director of Liqui-Box; Vice President, Fifth Third Bank, Columbus,
57-1997 Ohio
Samuel N. Davis.................. Vice President, Development and Director of Liqui-Box
34-1997
C. William McBee................. Chief Operating Officer, President, Secretary and Director of
56-1996 Liqui-Box
</TABLE>
The following directors will continue to serve after the Annual Meeting
until the 2000 Annual Meeting of Shareholders:
<TABLE>
<CAPTION>
NAME, AGE, YEAR LIQUI-BOX POSITIONS AND OFFICES WITH LIQUI-BOX, PRINCIPAL OCCUPATION AND OTHER
DIRECTORSHIP COMMENCED DIRECTORSHIPS
- --------------------------------- -------------------------------------------------------------------------------
<S> <C>
Samuel B. Davis.................. Chairman, Chief Executive Officer, Treasurer and Director of
57-1977 Liqui-Box
Robert S. Hamilton............... Vice Chairman and Director of Liqui-Box; Director of Lancaster
70-1984 Colony Corporation
Russell M. Gertmenian............ Partner, Vorys, Sater, Seymour and Pease LLP; Director of Liqui-Box
51-1995 and of AirNet Systems, Inc.
</TABLE>
Mr. McBee has been Chief Operating Officer and President of Liqui-Box since
December 1997. From February 1994 until December 1997, Mr. McBee was a Vice
President of Liqui-Box. Mr. Samuel N. Davis has been Vice President, Development
of Liqui-Box since April 1996. From September 1995 until April 1996 and prior to
January 1993, Mr. Samuel N. Davis held various offices with Liqui-Box. From
January 1993 through August 1995, Mr. Samuel N. Davis was an active investor in
Zacchaeus Clothiers, Columbus, Ohio, a clothing retailer. Each other director or
nominee for election as a director has had the same principal occupation for the
past five years.
4
<PAGE>
Russell M. Gertmenian, a director of Liqui-Box, is a partner in the law firm
of Vorys, Sater, Seymour and Pease LLP, which rendered legal services to
Liqui-Box during the 1998 fiscal year and continues to render legal services to
Liqui-Box during the 1999 fiscal year.
Samuel B. Davis is the father of Samuel N. Davis.
During 1998, there were two meetings of Liqui-Box's Board of Directors. Each
of the incumbent directors attended at least 75% of the aggregate of the total
number of meetings held by the Board of Directors during the period he served
and the total number of meetings held by all committees of the Board of
Directors on which he served during the period he served.
Liqui-Box has an Audit Committee consisting of Carl J. Aschinger, Jr.,
Russell M. Gertmenian and Robert S. Hamilton. The Audit Committee did not meet
during 1998. Its function is to review the adequacy of Liqui-Box's system of
internal controls, to investigate the scope and adequacy of the work of
Liqui-Box's auditors and to recommend to the directors a firm to serve as
Liqui-Box's auditors.
Liqui-Box does not have a compensation committee or a nominating committee
separate from the Board as a whole.
REPORT OF THE BOARD OF DIRECTORS AND
STOCK OPTION COMMITTEE
ON EXECUTIVE COMPENSATION
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF LIQUI-BOX'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THIS REPORT AND THE GRAPH
SET FORTH ON PAGE 10 SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH
FILINGS.
The Board of Directors makes decisions on compensation of Liqui-Box's
executive officers, except that the Stock Option Committee makes decisions on
stock option compensation. Set forth below is a report of the Board addressing
Liqui-Box's compensation policies as they affect Samuel B. Davis, the Chief
Executive Officer (CEO), and Robert S. Hamilton, C. William McBee, Samuel N.
Davis, Stewart M. Graves, Barry L. Pritchard and Robert D. Beck, the other
current executive officers of Liqui-Box.
COMPENSATION PRINCIPLES
Liqui-Box's executive compensation program has existed in its present form
for approximately thirteen years and consists of base salary, a bonus based on
pretax profits payable under the Liqui-Box Corporation Profit Participation Plan
(the "Liqui-Box PPP"), contributions to various savings and stock ownership
programs and stock options.
Liqui-Box recognizes the need for executive compensation to be directly
reflective of corporate earnings performance. As such, the philosophy has been
for many years, and continues to be, that base salary should constitute a small
portion of an executive officer's total compensation package with the largest
portion of his compensation being based on an allocated percentage of pretax
profits under the Liqui-Box PPP. This practice applies to the majority of
Liqui-Box employees, with the exception that, at lower levels of responsibility,
a greater portion of compensation is base salary with less of the employee's
total compensation being tied to profit.
Under the Liqui-Box PPP, pretax profits are calculated quarterly for the
first three quarters and are estimated in December for the fourth quarter.
Liqui-Box applies a fixed percentage to each quarter's pretax profit to come up
with an allocation to be distributed among all the eligible employees in the
form of a quarterly bonus. This allocation is further broken down to distribute
a greater fixed percentage to those employees who have a more direct impact on
corporate profits (CEO, officers, managers) and a
5
<PAGE>
smaller fixed percentage to those employees who have a less direct impact on
profits. Each employee's share of the pool is further impacted by the number of
employees in the overall bonus pool in any year.
If Liqui-Box's pretax profits increase, the allocation of pretax profit
dollars to compensation increases in direct proportion to the increase in pretax
profits. If pretax profits decrease, so does the allocation of pretax profit
dollars to compensation. This directly impacts compensation of executive
officers, as well as all other eligible employees.
The Board believes that this type of compensation has attracted, and
continues to attract, the type of executive officers and employees that are
critical to the long-term success of Liqui-Box. The Board also believes that
this type of compensation has led, and will continue to lead, to the solid
earnings growth of Liqui-Box while rewarding executive officers and employees
for their joint effort to improve profitability.
Since 1992, stock option grants have been used to create long-term
incentives to continue the growth in shareholder value. In that year, the Stock
Option Committee adopted guidelines for annual option grants under the 1990
Liqui-Box Corporation Stock Option Plan (the "1990 Stock Option Plan"). The
Stock Option Committee believes option grants in accordance with these
guidelines in the past has accomplished, and in the future will accomplish, the
objective of linking the compensation of executive officers to increases in
shareholder wealth as reflected in the market price of the common shares.
Accordingly, in October 1998, the committee granted options to Messrs.
McBee, Pritchard and Beck based on the adopted guidelines and its subjective
determination of the relative current and future contribution that each of them
has made or may make to the future long-term welfare of the Company.
Section 162(m) of the Internal Revenue Code of 1986, as amended, prohibits a
publicly-held corporation, such as Liqui-Box, from claiming a deduction on its
federal income tax return for compensation in excess of $1 million paid for a
given fiscal year to the chief executive officer (or person acting in that
capacity) at the close of the corporation's fiscal year and the four most highly
compensated officers of the corporation, other than the chief executive officer,
at the end of the corporation's fiscal year. The $1 million compensation
deduction limitation does not apply to "performance-based compensation."
Liqui-Box does not have a policy that requires all compensation payable in
1998 and thereafter to the covered executive officers to be deductible under
Section 162(m). Liqui-Box has not attempted to revise the Liqui-Box PPP or the
1990 Stock Option Plan to satisfy the "performance-based compensation"
exceptions but may, in the future, consider doing so if compensation paid
thereunder would otherwise not be deductible under Section 162(m) and such
provisions would not distort or discourage the existing incentives for
performance that enhance the value of Liqui-Box. In all cases, however, whether
or not some portion of a covered executive officer's compensation is
tax-deductible, Liqui-Box will continue to carefully consider the net cost and
value to Liqui-Box of its compensation policies.
COMPANY PERFORMANCE AND CEO COMPENSATION
As indicated above, Liqui-Box's executive compensation program is based, in
large part, upon business performance. This pay-for-performance program is
exemplified in the compensation of the CEO.
The Board has believed, since the mid-1980s when the present executive
compensation program was approved, and continues to believe, that Mr. Davis'
base salary of $70,000, which has been unchanged for approximately six years, is
substantially below the base salaries of CEO's in the peer group included in the
performance graph.
Approximately 94% of Mr. Davis' cash compensation for 1998 was paid in the
form of a cash bonus under the Liqui-Box PPP. The amount of this bonus is
directly tied to the pretax profits of Liqui-Box. Mr. Davis' 1998 cash bonus
under the PPP program increased from the 1997 amount in proportion to the
increase in pretax profits from 1997 to 1998. Had Liqui-Box failed to make a
profit, Mr. Davis, as well as most of the other employees, would have received
no bonus under the Liqui-Box PPP.
6
<PAGE>
Submitted by:
Carl J. Aschinger, Jr.*
Charles R. Coate *
Samuel B. Davis
Samuel N. Davis
Russell M. Gertmenian*
Robert S. Hamilton
C. William McBee
------------------------
*Member of Stock Option Committee.
SUMMARY COMPENSATION TABLE
The following table summarizes compensation awarded or paid to, or earned
by, each of Liqui-Box's five most highly compensated executive officers during
each of the last three years:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
---------------
ANNUAL COMPENSATION SECURITIES
--------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS/SARS(#) COMPENSATION($)
- -------------------------------------------------- ---- -------- ---------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Samuel B. Davis, 1998 $ 70,000 $1,164,312 0 $11,044(1)
Chairman, Chief 1997 $ 70,000 $1,032,715 0 $15,123
Executive Officer, 1996 $ 70,000 $ 955,910 0 $ 9,758
Treasurer
C. William McBee, 1998 $ 70,000 $ 385,273 6,250(2) $11,209(1)
President 1997 $ 70,000 $ 212,939 0 $12,202
1996 $ 70,000 $ 151,765 0 $11,405
Samuel N. Davis, 1998 $ 51,000 $ 149,872 0 $ 7,341(1)
Vice President-- 1997 $ 51,000 $ 134,900 0 $ 5,466
Development (3) 1996 $ 46,100 $ 51,650 0 $ 103
Stewart M. Graves, 1998 $ 42,000 $ 157,920 0 $19,992(1)
Vice President-- 1997 $ 62,000 $ 101,110 0 $16,311
International (4) 1996 $ 78,757 $ 74,287 0 $15,550
Barry L. Pritchard, 1998 $ 40,900 $ 95,981 2,224(2) $ 3,466(1)
Vice President-- 1997 $ -- $ -- 0 $--
Technology & 1996 $ -- $ -- 0 $--
Equipment
Development (5)
</TABLE>
- ------------------------
(1) Includes employer contributions to the Liqui-Box ESOP and to the 401(k)
portion of the Liqui-Box Corporation Employees' Profit Sharing and Salary
Deferral Plan (the "Liqui-Box Profit Sharing and Salary Deferral Plan").
Does not include amounts allocable to the named executive officers' accounts
in the deferred profit-sharing portion of the Liqui-Box Profit Sharing and
Salary Deferral Plan for 1998, which amounts will be calculated during 1999
and disclosed as earned in 1998 in next year's proxy statement. The amount
shown for Stewart M. Graves relates to employer pension costs in the United
Kingdom.
(2) Options granted pursuant to the 1990 Stock Option Plan. See table under
OPTIONS GRANTED IN THE LAST FISCAL YEAR for more detailed information on
such options.
7
<PAGE>
(3) Samuel N. Davis became an executive officer in April 1996.
(4) Mr. Graves became an executive officer in August 1996.
(5) Mr. Pritchard became an executive officer in December 1998.
OPTIONS GRANTED IN THE LAST FISCAL YEAR
The following table sets forth information concerning individual grants of
options made under the 1990 Liqui-Box Corporation Stock Option Plan during the
last fiscal year to each of the named executive officers. Liqui-Box has never
granted stock appreciation rights.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM(1)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ------------------
NAME GRANTED (#) FISCAL YEAR PRICE ($/SH) DATE 5% 10%
- ---------------------------------------- ----------- ------------ ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
C. William McBee........................ 6,250(2) 10.5% $ 40.00 10/11/08 $157,225 $398,438
Barry L. Pritchard...................... 2,000(3) 3.3% $ 40.00 10/11/08 $ 50,312 $127,500
224(4) .4% $ 42.00 08/31/08 $ 5,917 $ 14,994
</TABLE>
- ------------------------
No other options were granted to named executive officers during fiscal 1998.
(1) The amounts reflected in this table represent certain assumed rates of
appreciation only. Actual realized values, if any, on option exercises will
be dependent on the actual appreciation of the common shares of Liqui-Box
over the term of the options. There can be no assurances that the Potential
Realized Values reflected in this table will be achieved.
(2) These were granted on October 12, 1998 as incentive stock options, and
become exercisable 40% per year on the second and third anniversaries of the
grant date, and 20% on the fourth anniversary of the grant date, provided,
however, that the options become fully exercisable upon an earlier change in
control of Liqui-Box. The options are forfeited upon the executive officer's
leaving the employ of Liqui-Box, except that if the executive officer's
employment is terminated by reason of his death or becoming disabled, the
options may be exercised at any time during the six-month period after his
death or termination of employment, subject to the stated term of the
options. If the executive officer enters into competition with Liqui-Box
within 18 months after the termination of his employment, the Stock Option
Committee may require him to return to Liqui-Box the economic value of any
option exercised during the six-month period prior to the date of the
termination of his employment.
(3) These were granted on October 12, 1998 as incentive stock options and follow
the same guidelines as described in note (2), above, except they become
exercisable in 25% per year increments beginning on the first anniversary of
the grant date.
(4) These were granted on September 1, 1998 (prior to the date Mr. Pritchard
became an executive officer), as part of the LB Shares program, whereby
Liqui-Box grants options annually to the majority of non-executive employees
based on prior year's wages. The options become exercisable in 25%
increments, per year, beginning on the anniversary of the grant date and are
forfeited upon termination of employment for reasons other than death or
disability.
8
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information with respect to options
exercised during the last fiscal year by each of the named executive officers
and information concerning unexercised options held at year end by such
executive officers:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES YEAR-END(#) FISCAL YEAR-END($)(1)(2)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------- -------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Samuel B. Davis................. 0 0 100,566 156,847 $ 2,770,659 $5,678,632
C. William McBee................ 0 0 22,307 20,004 $ 534,615 $ 500,156
Samuel N. Davis................. 7,208 $ 92,479 7,500 2,500 $ 181,875 $ 60,625
Stewart M. Graves............... 0 0 7,500 2,500 $ 181,875 $ 60,625
Barry L. Pritchard.............. 3,652 $103,549 1,734 4,105 $ 40,866 $ 69,819
</TABLE>
- ------------------------
(1) All values shown are pretax.
(2) Based on the fiscal year-end closing price of $52.00 per common share.
DIRECTOR COMPENSATION
Directors who are not employees of Liqui-Box receive a $2,500 per quarter
retainer. In December 1998, two (2) directors, each elected to receive 56
Liqui-Box common shares in lieu of a cash payment for their quarterly retainer.
Directors who are employees of Liqui-Box receive no additional compensation for
serving as directors.
TRANSACTIONS INVOLVING MANAGEMENT AND OTHERS
In February 1998, Liqui-Box repurchased 35,000 Liqui-Box common shares from
the Jasam Foundation, a charitable foundation, for which Samuel B. Davis and his
sisters serve as trustees, at $38.00 per share, which price was below the fair
market value of the common shares on the date of repurchase.
On July 13, 1998, Liqui-Box repurchased 2,391 Liqui-Box common shares from
Barry L. Pritchard at $51.50 per common share, which was the fair market value
of the common shares on the date of repurchase. These sales were offset by
option exercises in 1998 of 3,652 shares of common stock.
In 1998 Liqui-Box repurchased a total of 16,773 Liqui-Box common shares from
Samuel N. Davis at an average price of $47.58 per common share, which was below
the fair market value of the common shares on the dates of repurchase. These
sales were offset by an option exercise in October 1998 of 7,208 shares of
common stock.
During 1998, Liqui-Box felt it was in the best interest of Liqui-Box to
allow the Vice President of Sales and Marketing to acquire treasury stock
directly from Liqui-Box. Liqui-Box felt it was appropriate to allow this
individual to be rewarded if there were future increases in the value of the
common shares and to suffer the economic consequences if the common shares
failed to perform on a long-term basis. In furtherance of this aim, in November
1998, Robert D. Beck purchased 6,250 common shares at a purchase price of $40.00
per common share (the fair market value of the common shares on the date of
purchase). Liqui-Box guaranteed the loan obtained by Mr. Beck from a third party
bank in connection with the acquisition of these common shares. The indebtedness
is the responsibility of Mr. Beck, and it is anticipated that he will repay the
indebtedness using his own funds.
9
<PAGE>
PEER GROUP COMPARISON
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The following line graph compares the yearly percentage change in
Liqui-Box's cumulative total shareholder return (as measured by dividing (i) the
sum of (A) the cumulative amount of dividends for the measurement period,
assuming dividend reinvestment, and (B) the difference between Liqui-Box's
common share price at the end and the beginning of the measurement period; by
(ii) the common share price at the beginning of the measurement period) against
the cumulative return of the Wilshire 5000 Index and the Dow Jones
Containers/Packaging Industry Group Index for the five year period ended
December 31, 1998.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG LIQUI-BOX CORPORATION, WILSHIRE 5000
AND DOW JONES CONTAINERS/PACKAGING INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOW JONES
LIQUI-BOX WILSHIRE 5000 CONTAINER/PACKAGING INDEX
<S> <C> <C> <C>
1993 $100.00 $100.00 $100.00
1994 $89.00 $97.00 $103.00
1995 $80.00 $130.00 $112.00
1996 $89.00 $155.00 $141.00
1997 $108.00 $200.00 $160.00
1998 $146.00 $243.00 $140.00
</TABLE>
OVERALL--Each performance graph index begins with a base value of $100. This
base is adjusted by annual stock market price changes and cumulative annual
dividend payments over the time frame of each index (as specified by the SEC in
its disclosure rules).
LIQUI-BOX CORPORATION--Stock prices and dividends adjusted for stock splits.
WILSHIRE 5000--The broadest of all indices, tracking value of all stock
issues for which quotes are available. Changes are measured against a base value
established in December 31, 1980. This index is market-value weighted.
DOW JONES CONTAINERS/PACKAGING INDUSTRY GROUP--An industry index published
by Dow Jones of geographically representative companies in the industry. The
index is adjusted to account for stock splits and dividends.
BOARD OF DIRECTOR INTERLOCKS AND INSIDER PARTICIPATION
Liqui-Box does not have a compensation committee; therefore, the Board
functions as that committee. The Board includes Samuel B. Davis, Samuel N.
Davis, C. William McBee and Robert S. Hamilton, current executive officers of
Liqui-Box, each of whom participated in Board discussions concerning executive
officer compensation. Russell M. Gertmenian, who is a partner in the law firm of
Vorys, Sater,
10
<PAGE>
Seymour and Pease LLP, which rendered legal services to Liqui-Box during the
1998 fiscal year and continues to render legal services to Liqui-Box during the
1999 fiscal year, also serves on the Board of Directors and on the Stock Option
Committee, thereof.
NOTIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of Liqui-Box has selected Deloitte & Touche LLP to
serve as independent auditors for Liqui-Box and its subsidiaries at the close of
the current fiscal year. Deloitte & Touche LLP has served as independent
auditors for Liqui-Box since April 7, 1995. Representatives of Deloitte & Touche
LLP are expected to be present at the Annual Meeting, will be given the
opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions.
ANNUAL REPORT
The 1998 Annual Report, which includes financial statements and information
concerning Liqui-Box's operations during the 1998 fiscal year, accompanies this
Proxy Statement.
LIQUI-BOX WILL PROVIDE, WITHOUT CHARGE, TO ANY PERSON SOLICITED (UPON
WRITTEN REQUEST OF SUCH PERSON), A COPY OF LIQUI-BOX'S ANNUAL REPORT ON FORM
10-K FOR THE 1998 FISCAL YEAR, INCLUDING THE FINANCIAL STATEMENTS AND THE
FINANCIAL STATEMENT SCHEDULES THEREIN, REQUIRED TO BE FILED WITH THE SEC. SUCH
REQUEST SHOULD BE ADDRESSED TO SAMUEL B. DAVIS, CHAIRMAN, LIQUI-BOX CORPORATION,
P.O. BOX 494, WORTHINGTON, OHIO 43085-0494.
OTHER MATTERS
The management and the Board of Directors of Liqui-Box do not know of any
other matters that may come before the Annual Meeting. However, if any other
matters properly come before the Annual Meeting, it is the intention of the
persons named in the accompanying form of proxy to vote the common shares
represented by the proxy in their discretion as the Board of Directors may
recommend. The enclosed proxy is being solicited by the Board of Directors of
Liqui-Box. Liqui-Box will bear the cost of solicitation of proxies. In addition
to the use of the mails, officers, directors and regular employees of Liqui-Box,
may solicit proxies personally, by telephone or by facsimile.
SHAREHOLDER PROPOSALS
Proposals by Liqui-Box shareholders intended to be presented at the 2000
Annual Meeting of Shareholders must be received by the Secretary of Liqui-Box no
later than December 3, 1999, in order to be considered for inclusion in
Liqui-Box's proxy, notice of meeting and proxy statement relating to such
meeting and should be mailed to Liqui-Box Corporation, Post Office Box 494,
Worthington, Ohio 43085-0494, Attention: Secretary. If a shareholder intends to
present a proposal at the 2000 Annual Meeting of Shareholders, but has not
sought the inclusion of such proposal in Liqui-Box's proxy, notice of meeting
and proxy statement, such proposal must be received by the Secretary of
Liqui-Box prior to February 16, 2000 or Liqui-Box's management proxies for the
2000 Annual Meeting will be entitled to use their discretionary voting authority
should such proposal then be raised, without any discussion of the matter in
Liqui-Box's proxy, notice of meeting or proxy statement.
By Order of the Board of Directors
C. William McBee
SECRETARY
11
<PAGE>
LIQUI-BOX CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 21, 1999
The undersigned hereby constitutes and appoints Samuel B. Davis, C. William
McBee and Robert S. Hamilton, and each of them, with full power of substitution
and revocation, as proxy or proxies to appear and vote the common shares of
Liqui-Box Corporation ("Liqui-Box") which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Shareholders on April 21,
1999, and any adjournment thereof, for the following purposes:
<TABLE>
<S> <C> <C>
1. Election of four (4) directors for terms expiring in 2001.
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees listed
below)* below
</TABLE>
Carl J. Aschinger, Jr. Charles R. Coate Samuel N. Davis C. William McBee
*(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW)
---------------------------------------------------------------------------
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(OVER)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED BY THE
SHAREHOLDER(S) EXECUTING THE SAME. IF NO SPECIFICATION IS MADE, THE COMMON
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES
LISTED ABOVE AS DIRECTORS OF LIQUI-BOX. IF ANY OTHER MATTERS ARE BROUGHT BEFORE
THE MEETING OR IF A NOMINEE FOR ELECTION AS A DIRECTOR NAMED IN THE PROXY
STATEMENT IS UNABLE TO SERVE OR, FOR GOOD CAUSE, WILL NOT SERVE, THIS PROXY WILL
BE VOTED IN THE DISCRETION OF THE PROXIES ON SUCH MATTERS OR FOR SUCH SUBSTITUTE
NOMINEE(S) AS THE DIRECTORS MAY RECOMMEND.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement dated April 1, 1999 and hereby expressly revokes any and all
proxies heretofore given or executed by the undersigned with respect to the
common shares represented by this proxy.
<TABLE>
<S> <C>
Date ..............................................
...................................................
Signature(s)
...................................................
(Please sign here exactly as the name appears
herein. If common shares are registered in two
names, both should sign.) When signing as attorney,
executor, administrator, trustee, guardian or
corporate official, please give your full title.
</TABLE>
